Former Massachusetts Gov. Mitt Romney has taken considerable heat during the Republican primaries for the health-care legislation that passed while he was in office.
Sadly, election-year politics have overshadowed the real lessons of Massachusetts’ experiment.
The core question then-Gov. Romney was trying to answer was this: Should Massachusetts continue to pay hospitals more than $1 billion a year to care for the poor, or should it create a way for individuals to purchase their own insurance?
Romney’s original proposal was simple: Stop subsidizing expensive hospital care and instead require all Massachusetts residents to carry at least catastrophic insurance. Anything beyond that would be a matter of individual choice. The idea was to prevent taxpayers from having to pick up the tab for people unable or unwilling to pay for their own medical care.
To facilitate reform, Romney’s plan established a central agency, called an “exchange,” where individuals could buy health insurance directly.
Though the overwhelmingly Democratic state legislature amended Romney’s proposal, the new law, if properly implemented, could have made the Massachusetts health-care market far more customer-focused.
But that didn’t happen. Just months after the law was passed Republicans lost the governorship and Romney’s successor, Democrat Deval Patrick, became responsible for implementing the 2006 law. Since then, almost every key bureaucratic decision has leaned toward government control and away from individual decision-making and the market.
For example, the exchange’s idea of “minimum coverage” is equal to some of the most generous plans in other states. Additionally, roughly 40 percent of the people in the exchange pay no monthly premium for insurance, while small businesses have been hit with a variety of onerous requirements. Instead of creating a market with many choices, insurance has been over-standardized and the number of available plans limited, curbing innovation in plan design.
The legislature has done its part by expanding on the simple mandate for catastrophic coverage with eight new mandates.
Even with these deviations from Romney’s original plan, the empirical record on the law hardly matches the overheated views of Romney’s critics. If the measure of success is the number of uninsured, the plan has worked, with the percentage of uninsured dropping from 9.6 percent in 2006 to 5.6 percent in 2010. Over that same period, the percentage of uninsured nationally increased from 15.2 to 16.3 percent.
Such progress has not come without a cost. Prior to reform, Massachusetts paid hospitals roughly $1 billion per year to provide charity care to the poor. Spending on the programs and entities related to the law totaled $1.3 billion in 2007, the first full year of reform; it increased to $1.96 billion in 2010 and an estimated $2.1 billion last year.
Insurance premium costs have varied since the law passed. As a direct result of the law, those who purchase insurance individually have seen premiums drop. Employees covered by traditional employer-sponsored insurance, who are only indirectly impacted by the law, have seen premiums rise, similar to national figures.
On access, 89 percent of Massachusetts adults reported having primary care doctors in 2010, a slight increase. The law has not, however, decreased the number of individuals seeking costly routine care from emergency rooms, but the growth has slowed.
The Massachusetts experience offers several lessons.
First, we need more state experiments. Instead of rushing to redesign one-sixth of the U.S. economy, Washington should have waited for Massachusetts’ results and should have encouraged other states to experiment as well.
Second, Romney should not be shy about defending his effort in Massachusetts. Frankly, we need more governors to show similar leadership and courage – and try different solutions.
Six years in, even with less than ideal implementation, Massachusetts’ experiment has yielded some positive results.
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